Part 2 of my letter from Luca Guala, of the Italian consulting firm Mobility Thinklab. (Part 1, on personal rapid transit, is here.)

Last summer, we tested driverless minibuses along a route of 1.3 km on a pedestrianized boulevard in Oristano, a small town in Italy. The idea was to test driverless vehicles mixed with traffic.

Why minibuses and not taxis? Firstly, because it is much simpler to teach a robot to follow a fixed route, rather than teach it to go anywhere the passengers want to go. Such a system is already operational in Rotterdam (2getthere.eu/projects/rivium/) and it works well, but it has one drawback: the tracks are segregated and they represent an ugly severance in the urban tissue.

But if the vehicles are allowed to run with cars cyclists and pedestrians, a public transport route can be “adapted” with unobtrusive measures to accept driverless vehicles, and the people sharing the road will quickly learn to live with them. The main problem here was not technical, as legal.

Hence the idea of testing similar vehicles in an open field mixed with pedestrians. The first test we did had mixed results, the second test that will be done in La Rochelle, France this winter will take advantage of all that we learned in Oristano.

So what did I learn from all of this? That driverless cars very likely have a bright future, but cars they will always be. They may be able to go and park themselves out of harm’s way, they may be able to do more trips per day, but they will still need a 10 ft wide lane to move a flow of 3600 persons per hour. In fact, the advantage of robotic drivers in an extra-urban setting may be very interesting, but their advantages completely fade away in an urban street, where the frequent obstacles and interruptions will make robots provide a performance that will be equal, or worse than, that of a human driver, at least in terms of capacity and density.

True, they will be safer (especially because the liability for accidents will be borne upon the builder) and a robotic traffic will be less prone to congestion (I envision robotic cars marching orderly like robots, packed at 1.5 second intervals, while their occupants fume wishing they could take the wheel perfectly aware, but not at all convinced that their robocars are more efficient drivers than they are – or worse, they DO take the wheel overriding the ... robots!), but I do not expect driverless cars to dramatically increase the capacity of a lane to transport persons.

Driverless buses, on the other hand offer an interesting feature: the human driver is no longer needed, removing an important cost and several constraints. This allows them to serve efficiently and economically low-demand routes and time bands, while allowing [agencies] to concentrate the number of manned buses on high demand routes at little added cost.

I take all this automation talk with a grain of salt still, as I don't think we've begun to explore the human response to it. But Luca is right about the key point: driverless buses are a much easier problem than driverless cars, and their space-efficiency will continue to be crucial in busy corridors where even driverless cars will add up to gridlock.

Luca's last paragraph suggests that driverless buses will start with smaller vehicles in simpler situations, which is a possibility. But of course, once the concept is proven, the economics of driverlessness will create pressure to bring the technology to big buses. The same logic is also driving the movement to run fully-grade-separated without drivers, on the model of Vancouver, Dubai, and Paris. The logic of driverless trains is easy: with automated train controls systems there is really not much for a driver to do in non-emergency situations, and these cities have found that those tasks are easily automated. We are all used to small systems of this type, because we encounter them in large airports. The driverless bus in traffic is a harder problem, but we will have solved all of those problems if we ever develop driverless cars. In fact, the problem of the driverless bus, which never goes into alleys or minor streets, should be considerably easier, since navigation turns out to be one of the biggest challenges for the driverless car.

Note also that the challenge of planning for driverless cars is not in envisioning a utopia where they have complete dominion over the street. The future must be evolved, which means that we must plan for the interim state in which some cares are driverless and most aren't. That is a situation where driverless buses could thrive, because they will be competing with something that -- in terms of poor capacity utilization -- resembles today's traffic on major streets, not a world optimized for the driverless car.

As Luca indicates, we know what the problem with driverless transit will be: long fights with labor unions who feel entitled to cradle-to-grave security in a single job. It will be one more kind of automation that requires people to retrain and to participate in a more complex and competitive economy. In an ideal system, many drivers would be replaced by support jobs such as fare inspectors and roving problem-solvers; as on Vancouver's SkyTrain. This seems to be what Luca is envisioning when he speaks of the continued need for "manned" services.

But the real result of massively abundant transit -- which is the real point of the large driverless bus -- will be massively more opportunity for all kinds of innovation and commerce to happen in a city, unconstrained by the limits of car-based congestion. That's a wrenching change, and I am as adamant as anyone about the need to protect workers from exploitation. But in the long run, over a generation or two, the outcome will more interesting jobs for everyone. Bus drivers shouldn't encourage their children to go into the same profession with the same expectations, but that's true of many jobs -- perhaps even most jobs -- in this rapidly changing world.

Step out into most developing world cities, and you'll see something like this:

Lots of vans sitting around, or looking maybe like they're about to go somewhere useful. Vague cardboard signs in the windows suggest they may or may not be public transit of some kind.

They're called mutatus in Nairobi, colectivos in Latin America. Over much of the world these informal, private, for-profit vans, run at low cost for low fares in areas of high demand, forming the basic public transit for a city. Generally they run along a particular route out of a hub like the one above, but sometimes it's possible to vary the route depending on what you can negotiate with the driver. You can count on them to hit key locations but not necessarily the exact path they'll take. You also can't be sure of when they'll go. Sometimes they wait until they're full before leaving.

Matatus have organized themselves into routes because that's to their benefit; they train customers where to wait for them along reasonable paths so that they aren't driving around looking for customers individually. The idea of the route -- and of an efficient, non-duplicative spacing between routes -- arises spontaneously from the economics of the product.

But they almost all converge on downtown, creating huge jams there. Nairobi is clearly big enough to have large flows of people crosstown to many non-downtown destinations, suggesting that a more efficient and liberating network would have more grid elements. This is a common thing that goes wrong in privately evolved systems. Every matatu wants to go downtown because it's the biggest market, and a mutatu driver doesn't have to be coordinated with anyone else to fill a bus going to and from there. This problem that bedevils privately routed and scheduled operations everywhere.

Crosstown service, by contrast, requires frequency on a single path connecting several major dots, and it has to leave from organized non-downtown hubs where many other services connect to it. That requires more organization, so it's less likely to arise spontaneously out of private operators optimizing for themselves.

So you get a single market overserved and other markets underserved. This is very much like the way a narrowly-focused transit agency will throw too much service at a single market rather than building a network useful for many markets. It takes more planning and management to create a network, and this usually requires a government willing to impose order.

This same problem was observable after the wholesale privatization of buses in Britain. Suddenly there was lots of duplication of bus service into the biggest downtowns as everyone chased the easiest prize, but service disappeared from crosstown markets that could have done well, but that required a network of organized connections to succeed. That network is what privately motivated transit has trouble delivering, because it usually requires cooperating with people who are perceived as competitors.

Now and then, these systems get reorganized by government into more logical routes that spread the network across the city for easier everywhere-everywhere travel, as happened in Santiago in 2007. The transition is hell, but when you're finished, you have a network that's much easier to use to go all over the city, and a much smaller knot of buses downtown.

The moral? Disorganized transit systems "planned" by the actions of many private actors do naturally evolve certain forms of efficiency, but they do not naturally evolve into the most efficient and productive network for the whole city. That final push into coherence requires network design!

This map by Stamen Design shows the paths of the various Silicon Valley bus services that flood San Francisco each morning and evening peak. (Linewidth is proportional to frequency.) All these lines running around San Francisco extend south off the map, duplicating each other for more than 30 miles until they diverge to serve different employers in Silicon Valley. The colors indicate which employer. In general, these private buses are open only to the employees of the company in question.

These buses carry some of world's smartest geeks between the manicured suburban headquarters of Google, Apple, Facebook, Yahoo, EBay and Electronic Arts and the diverse, interesting, crowded, messy city that these geeks insist on living in -- a distance of 30-40 miles.

(Here is a great page showing the process Stamen went through to get to this map. As you'd expect from a design firm, it's officially a work of art, called The City from the Valley.)

There is a public transit option in the same corridor, the Caltrain commuter rail line, but it can't begin to compete with these buses for speed, directness, and certainly the number of transfers required.

How should we feel about these privately operated services, which are effectively employee benefits at these companies?

My favorite data design firm, Stamen, released a map showing all the private buses that run from San Francisco to Silicon Valley, the elite's mass transit. Work in one of those places, and you have a wonderful travel experience. Everyone else gets the bus or an underfunded Caltrain. One way for our country's elites. The car and a crowded highway for everybody else.

"The elite's mass transit" versus "underfunded Caltrain." Is this really a class divide, with all the perils that class-based thinking implies? These buses have to drive to San Francisco because the geeks on board aren't willing to buy a big house in the suburbs of Silicon Valley. They want to live in a city, where they step over homeless people and deal with crowds but also have access to all that a city offers. So they're an unusual elite.

If you love inner-city living so much that you're willing to commute almost two hours a day, then I expect you're someone who's happy with the basic proposition of city life. That means that you're used to being in close proximity to strangers, so I'd guess you'd be a willing passenger on a public transit system if that transit system were useful.

So the real story here is not the upscale demands of "elites" but the story of "underfunded Caltrain" and and more generally the way that infrequent, slow and poorly connected transit systems are forcing these big employers to run so much expensive service of their own.

The inadequacy of transit between San Francisco and Silicon Valley lies in several things. First, neither the employers nor most San Francisco homes are anywhere near the Caltrain commuter rail line, so using that line requires multiple transfers -- often two at the San Francisco end. Second, the line is infrequent, designed for speed rather than frequency, which means that using shuttles between business parks and rail stations always involves the slight anxiety of the bus being late and missing the train.

Politically, the problem with this commute is that it crosses two county lines, and in California, where almost all transport decision-making happens at county-level agencies, a multi-county transit problem is orders of magnitude harder to solve. There is little doubt that if Caltrain were all in one County -- maybe one the size of Los Angeles County -- it would be a vastly better service by now: more frequent, probably electrified, probably extended to make better connections in San Francisco. But split between three counties it has always seemed peripheral to many county-level decision makers, so when its needs have conflicted with another pet project, Caltrain has been consistently shoved aside.

Most recently, Caltrain's future has been made dependent on the California High Speed Rail Project, which will help improve and extend Caltrain only in the context of needing to share its track. It does appear that Caltrain will finally be extended to a downtown San Francisco terminal where most of the city will be one transfer away instead of two. Caltrain may also become a little faster if, as contemplated, some minor stations are closed. But Caltrain will probably never be frequent given the new constraints of track sharing.

**

But why should people have to commute such distances at all? In this case, it happened because a whole mass of companies decided that they all had to have vast corporate campuses that are too big to be in walking distance to anything. The critical mass of Silicon Valley congealed in the high-car age, as early icons like Hewlett and Packard outgrew their garage. Stanford University has always sat in Silicon Valley's midst like a queen bee, happy to seem the indispensable center of the burbling mass of innovation. Since then every new breakthrough firm, from Google to Facebook, has felt they had to be there.

But now, that critical mass is in the wrong place for the needs of the next generation. A few of the area's suburbs are trying to build downtowns that will give a bit of the urban vibe that younger geeks seem to value, but many of these suburbs are dominated by people who want nothing to change. So it comes down to how the next generation of internet employers choose think about how to attract top employees. Twitter made a courageous choice, moving its headquarters right into San Francisco, but Apple is digging itself deeper, building an even larger and more car-dependent fortress in its corner of the Valley.

Finally, this joke is on the lords of Silicon Valley itself. The industry that liberated millions from the tyranny of distance remains mired in its own desperately car-dependent world of corporate campuses, where being too-far-to-walk from a Caltrain station -- and from anything else of interest -- is almost a point of pride. But meanwhile, top employees are rejecting the lifestyle that that location implies.

Geeks whose brilliance lightens the weight of our lives have bodies that must be hauled 70 or more miles every day, at a colossal waste of energy and time. Is this really the future?

In a recent guest post, Peter Brown praised the Tyne and Wear (greater Newcastle) region in the UK for seeking to regain government powers of integrated planning. The new paradigm is what the Brits call a "contract scheme" in which the government controls planning and operators provide service under contract with government. This is pretty much how privatized operations work in North America. The rider's is a customer of the government agency, the government agency is the customer of the bus operating company. Each link has accountability; operating companies are accountable to their government purchasers, while government is democratically accountable to voters.

Bus operators in North East England have formed the North East Bus Operators' Association to vigorously oppose the imposition of a contract scheme in Tyne and Wear. They are working together with Nexus on a Voluntary Partnership Agreement (VPA), which will provide much of the benefits of a contract scheme without the 'unintended consequence' of transferring the financial responsibility to the public sector, particularly at a time when local authority finances are under increasing pressure. You can read about it here.

Commeter Peter Laws also responded enthusiastically to the fact that 90% of bus miles outside of London run without subsidy.

Not so fast. While it's obviously desirable to reduce subsidy/bus, is the purpose of this savings to be able to afford more buses? Or is it just to avoid spending money on bus service?

The problem with aiming zero-subsidy service is it usually implies zero public control. Government is shrivelled to the role of a "regulator," with the implication that, as in safety regulation, government can enforce laws but not direct the provision of service to serve larger public ends.

Government, especially local government, has entirely valid interests that are served by operating public transit services. These include not just social service needs, but also a desire to support its urban development intent, or, as in Oxford, a need to organize service so that it uses scarce street space more effectively. The old privatization paradigm made it almost impossible to address these needs. For example, Oxford's effort to get the two bus operators to co-operate on using street space more efficiently would have been impossible, because any such co-operation was considered collusion. (Legislation under the last Labour government finally made it possible.)

Co-ordination of land use and transit, too, was impossible under the old regime, except insofar as an operating company considered it to be in their financial interest. There was no way for government to mandate such co-operation.

Or consider the great problem of frequency. One way you minimize subsidy or maximize profit is to run as little service as possible to serve as many riders as possible, just as the US airlines are doing, for example. Thus, a private operator tends to be happy with a much lower level of service than a public transport authority or local government or local population want, and would pay for.

This is especially important when a Frequent Network is at stake. There may be large network effects, with long term importance to city form and sustainability outcomes, that arise from running a service more frequently than its break-even point, but it is fiendishly hard to do this even by subsidizing the operator to do it, because you are then declaring certain trips of a line to be "profitable" and others "subsidized." In fact, because people respond so much to frequency and span, ridership among trips on a route is thoroughly interdependent, so you cannot declare ridership on a trip to be solely the result of that trip's existence. As a result, any separation between "profitable" vs "subsidized" trips on a route becomes an unmeasurable fiction.

So it's hard. I think the American privatization model (transit agency controls planning, hires operators just for operations and maintenance) enables much clearer democratic conversations about the nexus between public transport and public goods. But I understand why bus operating companies in the UK-influenced world often don't like that outcome, and why people whose main goal is to not spend money on transit don't like it either.

Peter Brown is a lifelong UK transit enthusiast (and an HT reader from the earliest days). He is a member of the Light Rail Transit Association (LRTA), and a former volunteer tram driver at Seaton Tramway, Devon, England.

The latest issue is the stated ambition of the Tyne and Wear Passenger Transport Executive (PTE), which today calls itself 'Nexus,' to restore government control of planning and management for the bus system in the Newcastle-upon-Tyne/Gateshead/Sunderland conurbation. This is significant because for a few years in the 1980s this authority operated the UK's only example of an integrated transport system on a par with European best practise -- a system that was destroyed by the Thatcher government.

In the early 1980s, the Tyne and Wear PTE directly operated a large bus system which was formed by the takeover of the former municipal fleets of Newcastle, Gateshead, and Sunderland, and also built and operated the LRT system (The Metro). During the short life of this integrated system it was possible to travel between any two points on a single ticket by bus, local train, Metro, and ferry services. The bus system was redesigned to feed into the metro at purpose built interchanges for journeys into central Newcastle, thus reducing bus movements across the heavily congested Tyne bridges. Unfortunately the Thatcher Government deregulation of bus services destroyed this integrated network. Deregulation swept away a regulated system that had existed in the UK since the 1930s. It meant that bus companies (referred to as ‘Operators’ in the UK) had to self financing through the fare box. Blanket subsidies and any form of network co-ordination (or what Americans would call "integrated network planning") were terminated. In short, it became illegal to think of transit as a public resource, integrated with the city, and managed for greatest possible efficiency and usefulness.

Instead, the ideal became competition. Bus operators could operate "commercial" (non-subsidised) networks anywhere, and the role of local government became to purchase subsidized services wherever more service was desired. Integrated transit features that many cities take for granted -- including citywide fare systems, lines that aim to connect with one another, and rational management of limited resources, became effectively impossible.

Yet if the goal was competition, the system failed. As in most of the UK today, there is very little direct on-the-road competition between the three bus companies in Tyne and Wear. Instead, each company has settled into a "territory" in which the lack of competition is the key to profitability. Passenger journeys starting in one operator's territory that finish in another's require the passenger to change buses and pay twice. Nexus is no longer happy about this and wants to take over the commercial networks and purchase operations from the bus companies - this is known as a 'Quality Contract' and there is new (as yet unused) legislation to do this.

In short a Quality Contract would involve the suspension of deregulation within a specified area and the imposition of a tendered system whereby the transport authority would specify the network, fares, frequencies etc. As urban bus operation outside London is a profitable activity (nationally approximately 90% of bus mileage requires no direct revenue support) the proponents of Quality Contracts believe that massive subsidies would not be required. In order to bring about a Quality Contract several conditions must be satisfied, with an independent board to adjudicate. The promoters would have to prove that the new system would:

have a positive impact on the use of bus services

will be of benefit to users of bus services by improving quality

will contribute to the implementation of the local transport policies

achieve all the above in an economic, efficient and effective manner.

All the above leave lots of room for argument against them, and since the commercial operators would in effect have their businesses sequestrated without compensation it is likely they will use the legal process in full, including the European Court of Human Rights.The alternative approach for a local transport authority to increase its influence in the provision of bus services is the 'Statutory Quality Partnership' as demonstrated in Oxford last year using powers from the 2008 Transport Act.

The 2008 Act expands the terms of the previous voluntary Quality Partnership model to allow a LTA [Local Transport Authority -- the tier of local government responsible for transport] to specify requirements as to frequencies, timings or maximum fares as part of the standard of service to be provided under a scheme, in addition to quality standards. But it also provides important safeguards to ensure that unrealistic conditions are not imposed on operators, and that their legitimate right to a fair commercial rate of return on their investment is not undermined. The process by which an operator can object to particular standards included in a scheme relating to frequencies, timings or maximum fares, is an important feature of this. But at the same time it places a responsibility on them to justify the grounds for their objection, thus minimising the scope for vexatious or frivolous objections.

In the context of Oxford, where such a scheme was implemented last year, there is no history of municipal bus operation. This could account for the partnership approach being more acceptable to that LTA.

If I were one of the experts quoted I'd be a little insulted by it, though we understand that this is the nature of TV commercials.

There are many different ways to involve private enterprise in funding providing transit services, and these are so different that vague talk of "privatization" simply doesn't illuminate what's going on.

At one extreme, you can privatise operations, planning, fleet, public information, branding and almost everything else. In this model, prominent in Britain (but not London) and in British-influenced countries like Australia and New Zealand, government merely subsidises services that wouldn't make a profit, but doesn't try to control the overall planning of the network. This approach sometimes "works," in a political sense, in areas where you have low expectations for transit overall, such as rural areas. It's been very problematic in urban areas, because it deprives government of the control that its subsidies should be buying, and makes it impossible to plan rational networks that would meet the shared goal of a city and its people, and that would use limited street space efficiently. Sydney, Brisbane, and Auckland all went far down this path and are trying, at various speeds, to pull back from it and re-assert government control over most aspects of planning and marketing.

At the other extreme, you can privatise operations only. This is the model used in a number of lean North American operators such as Southern California's Foothill Transit. In Australia, only Perth takes this approach, but it's very successful there. A public agency answerable to voters keeps full control of planning, and also owns the fleet and facilities. Private operating companies are hired only to provide operations and maintenance, under contracts to the agency that are periodically re-opened to competitive procurement. This is a targeted kind of privatisation aimed at the functions that are the biggest budget-killers for all-public agencies: labor costs, labor relations, and liability related to operations and maintenance. You can make a good case that the private sector is in a better position to handle all of these than government agencies are, and while I won't argue the whole case here, many agencies -- especially newer agencies that don't have legacy labor commitments -- are finding this a very good model. In Australia, Perth works this way, and other cities are moving this direction.

You can find examples anywhere on the spectrum between these extremes. Finally, briefly, there's a whole third kind of privatisation that's about the development of major infrastructure, typically called a public-private partnership. This seems to be what Yonah Freemark is referring to in the ad's scare-quote about Vancouver. While the PPP that built the recent Canada Line has been deservedly controversial, Vancouver's operations aren't privatized at all; they're run mostly by subsidiary companies owned by the transit agency, Translink, and that agency is very much in control of presenting a single unified system to the public.

As I mentioned briefly over the weekend, Christopher Leinberger in the Atlantic is wondering if we can go back to the early 20th century practice of letting developers build rail transit lines, and reap the resulting increase in property values. This idea is likely to have a lot of superficial appeal, because it combines two pervasive attitudes in New World countries: (a) nostalgia for a supposedly simpler past and (b) a suspicion, especially common in the US, that government is always intrinsically less competent than the private sector.

But as someone who's been around a lot of privately-funded transit projects (usually called public-private partnerships or PPPs) I think it's important to pour some cool if not frigid water on the idea:

Most construction projects that were financially viable in 1900 would not be viable today, including the foundations of the great rapid transit networks that we see in Europe and New York. In 1900 there were no environmental laws nor many labor laws of substance, so of course construction was vastly cheaper. (This point needs to be raised not just in response to privatization-nostalgia arguments such as Leinberger's, but to all forms of nostalgia about old technologies.) It's tempting to believe that we build subway lines so much more slowly than Europe did around 1900 because we've lost some collective will. While that's partly true, it's also true that the values of today -- especially as they relate to environmental impact and labor -- are different, and more expensive, than they were back then. Countries that are building rapid transit today, such as China and India, generally have much lower labor costs and less onerous environmental impact processes (which is to say, much less effective ones).

A constant frustration around PPPs is the suspicion that government inevitably has the weaker hand in negotating them, and that as a result the benefits flow primary away from the public purse.

Private enterprise is efficient only in response to competition. Construction work on a rail project almost always goes to the private sector, because it's easy to set up a robust competition for that work. But it's harder to expose the private sector to competition when one company or consortium takes over planning and financing as well as construction. In Australia, the privatization frenzy has given us privately owned road tunnels and privately owned pieces of urban rail networks. No competitive pressure operates on the toll-collecting owners of these projects after they're built.

When we're talking about privately owned bits of a larger network, it can be hard to get the necessary integration with the rest of the network. Privately funded pieces of transit infrastructure often need higher fares than the publicly-owned bits, and these add complexity to the fare system.

A private operator of public transit will care about total revenue but may not care about ridership. A few high-paying riders give you as much revenue as a lot of low-paying ones. But we the people DO have an interested in services that carry more people, and that interest is hard to manifest in typical privately led rail projects. Sydney has one privately built segment in its rail network -- the four-station Airport Line -- and its fares ($15 one way, airport to city) are so high that it's cheaper for me to take a taxi. The two non-Airport stations on the line have missed out on a lot of redevelopment opportunity because the fares are just too high for the system to be useful.

Finally, developer-funded rail lines were used around 1900 to open up huge greenfield areas for new urban development -- greenfields that tended to be consolidated under one or a few owners. Today, we would call that sprawl. Today, also, land ownership is much more divided and hard to organize, even on the suburban fringe. Rail lines intrinsically bring their benefits to a large area, and only the government is usually in the position to spread the costs correspondingly widely.

In both the transit industry and the urban design world, we hear a lot about how great things were in 1900. But I'm glad to be living now rather than then. Aren't you?

UPDATE: In respose to a superb opening comment by Alex Block, let me clarify that I am not arguing against value capture or tax-increment financing, which Leinberger also endorses. These are methods of financing a rail line partly through debt that will be repaid based on higher land values -- and thus higher land taxes -- that the line will generate. There is no reason we can't continue to expand on these principles as a revenue source. I'm criticizing only the more simplified nostalgia on which Leinberger builds his argument.

Tony Judt has a fascinating piece at New York Review of Books on the ideal of social democracy manifested by most European governments: a democratic state with relatively high levels of taxes and government services. Writing from a leftist perspective, he worries about the recent rise of economic analysis as a primary basis for government decisions. This trend, which he traces to Margaret Thatcher, has shaped the thinking of a generation of bureaucrats, not just in Britain but throughout the Commonwealth and also in parts of Continental Europe. It's almost universal in the British-derived cultures of Australia and New Zealand, where I work now. Here, it often seems an idea about transit counts for nothing if it can't be expressed in terms of "Cost Benefit Evaluation" (CBE) and "Key Performance Indicators" (KPI).

To strip the difference down to its essence: An American transit bureaucrat will tend to describe a high-ridership transit service as "successful." A typical bureaucrat in the British-derived world will tend to describe the same service as "profitable." The British view sees riders as fares, and see the entire enterprise on the model of a business. In the British view, government's role in transit is that of a "regulator," the impassive umpire of a fair fight between, for example, train companies and airlines, or between subways, buses, and private cars. From what I've seen in Australia, British-derived government thinking seems perpetually confused about how to reconcile this "regulation" function with environmental and social imperatives that require government to champion public transit, and to lead the way in major public transit investment.

Judt's essay is especially fascinating for the transit advocate because it contains an extended discussion of how economic thinking has affected public transit. Here is that passage in full, with some heckling from me along the way. What it illustrates, I think, is the degree to which even a leftist British-trained writer decrying economic thinking can be unconsciously trapped by it.

Imagine, if you will, a railway station. A real railway station, not New York's Pennsylvania Station: a failed 1960s-era shopping mall stacked above a coal cellar. I mean something like Waterloo Station in London, the Gare de l'Est in Paris, Mumbai's dramatic Victoria Terminus, or Berlin's magnificent new Hauptbahnhof. In these remarkable cathedrals of modern life, the private sector functions perfectly well in its place: there is no reason, after all, why newsstands or coffee bars should be run by the state. Anyone who can recall the desiccated, plastic-wrapped sandwiches of British Railway's cafés will concede that competition in this arena is to be encouraged.

But you cannot run trains competitively. Railways—like agriculture or the mails—are at one and the same time an economic activity and an essential public good. Moreover, you cannot render a railway system more efficient by placing two trains on a track and waiting to see which performs better: railways are a natural monopoly. Implausibly, the English have actually instituted such competition among bus services. But the paradox of public transport, of course, is that the better it does its job, the less "efficient" it may be.

Judt has swallowed Thatcher's bait, which was thinly concealed in the economic lingo. To say that public transport's real "job" is to do inefficient things is to bow to Thatcher's demeaning view of the whole enterprise as "social." (Judt quotes Thatcher's famous remark: "there is no such thing as society. There are only individual men and women and families.") To rescue transit's "social" role from Thatcher's attack, Judt accepts that high-ridership services, by virtue of being "efficient," are somehow not a valid area of public concern and can be left to the free market.

In fact, high-ridership transit services are almost always the result of aggressive government investment and policies, including the pricing of car travel, the planning of dense centers around stations, and a huge range of other actions. A democratic government must care not just about the bottom line of the transit but also about the quality of the community it serves. In this role, it may advocate low-ridership services to serve other sustainability goals. For example, when opening a new "transit oriented development," the long-term health of the community may require a lot of public transit service just as the first people are moving in, to help them establish transit habits, own fewer cars, etc. This service will be "unprofitable" but can be a rational part of a long-term sustainability strategy.

Thatcher's formulation, swallowed whole by Judt, is that service is either "profitable" or "social." Judt will go on to make "social inclusion" arguments for why service to low-ridership markets, such as rural towns, should be retained. Fine, but he's already given away the revenue that could pay for much of that service -- the "profits" gained by the private operating company running the "profitable" services. He's also given away funds that could be used to fund new infrastructure investments for the next generation of profitable services -- investments that should be government-funded not because they'll be profitable, but because they'll be intrinsic parts of a humane, sustainable, and livable city -- all valid criteria for government attention.

A bus that provides an express service for those who can afford it and avoids remote villages where it would be boarded only by the occasional pensioner will make more money for its owner. But someone—the state or the local municipality—must still provide the unprofitable, inefficient local service. In its absence, the short-term economic benefits of cutting the provision will be offset by long-term damage to the community at large. Predictably, therefore, the consequences of "competitive" buses—except in London where there is enough demand to go around—have been an increase in costs assigned to the public sector; a sharp rise in fares to the level that the market can bear; and attractive profits for the express bus companies.

Trains, like buses, are above all a social service. Anyone could run a profitable rail line if all they had to do was shunt expresses back and forth from London to Edinburgh, Paris to Marseilles, Boston to Washington. But what of rail links to and from places where people take the train only occasionally?

Again, Judt's voice is a plaintive wail from deep inside Thatcher's conceptual trap. He argues that government should subsidize trains that are lightly used, because of social needs there, but in dismissing the Boston-Washington run as "profitable" he seems to accept that government has no claim on the profits from lines that are heavily used. Judt has unconsciously signed onto a plan to privatize profits while subsidizing losses, the classic "moral-hazard" or lose-lose situation that lies at the foundation of the problem of government.

No single person is going to set aside sufficient funds to pay the economic cost of supporting such a service for the infrequent occasions when he uses it. Only the collectivity—the state, the government, the local authorities—can do this. The subsidy required will always appear inefficient in the eyes of a certain sort of economist: Surely it would be cheaper to rip up the tracks and let everyone use their car?

No, but it might be cheaper to close some branch train lines and serve those towns with buses. If you're Hokkaido Railways, part of Japan's state railway JR, you might even invent a rail vehicle that can turn into a road vehicle partway along its run, so that you can turn rail branches into bus lines without even requiring a connection.

In 1996, the last year before Britain's railways were privatized, British Rail boasted the lowest public subsidy for a railway in Europe. In that year the French were planning for their railways an investment rate of £21 per head of population; the Italians £33; the British just £9.[4] These contrasts were accurately reflected in the quality of the service provided by the respective national systems. They also explain why the British rail network could be privatized only at great loss, so inadequate was its infrastructure.

But the investment contrast illustrates my point. The French and the Italians have long treated their railways as a social provision. Running a train to a remote region, however cost-ineffective, sustains local communities. It reduces environmental damage by providing an alternative to road transport. The railway station and the service it provides are thus a symptom and symbol of society as a shared aspiration.

But the key here is that the French and Italian governments -- through their state-owned railways SNCF and Trenitalia -- have allowed profits from high-ridership lines to fund further improvements that serve government policy. This is not quite the same as a private business investing in infrastructure that will deliver future profit. These government companies invest not just in "social-service" branch lines to small towns, but also in the next generation of high-speed rail capacity that will draw even more ridership (and more profit) from existing high-ridership corridors such as Paris-Lyon-Marseilles. They understand, in short, that more riders are not just more revenue. More riders are part of a government-driven strategy for pursuing a range of public goods: less need for roads, less need to expand airports, fewer accidental deaths, more compact cities, lower carbon emissions etc.

I suggested above that the provision of train service to remote districts makes social sense even if it is economically "inefficient." But this, of course, begs an important question. Social democrats will not get very far by proposing laudable social objectives that they themselves concede to cost more than the alternatives. We would end up acknowledging the virtues of social services, decrying their expense...and doing nothing. We need to rethink the devices we employ to assess all costs: social and economic alike.

"Social" and "economic" are just two legs of the three-legged stool that has come to be known the "triple bottom line," a useful scheme for thinking about all of the possible valid outcomes of public policy. The missing third term is "environmental." Judt is so attached to the "social" dimension of the question that the other two terms, "economic" and "environmental," have collapsed in his mind into a single opponent, the "economic." We are all used to thinking in binary (us/them, this/that) terms, but the triple bottom line requires us to hold three points of view in the mind at once -- which, to be fair, is much harder than it sounds.

We in the transit business have, perhaps, a distinctive perspective on this question, because our product serves both social and environmental goods. We see in our daily work how these goods come into conflict, but also the many ways that they intertwine. As the bumper sticker says, there are "no jobs on a dead planet." High-ridership transit is a tool for healing and sustaining cities, and its capacity to bring large numbers of people to central locations empowers not just the downtown economy but also the civic square, the arts, the tourism industry, the commons, all the distinctively urban experiences that happen only when people can come together, without their cars.

If we are to make visible the environmental and civic goods that arise from our work, we must never let them be concealed as profits, just as we must never allow ridership to be reduced to revenue. There are plenty of roles for competitive private enterprise in our business. (As a transit planning consultant, I've spent my whole career in the private sector.) But the outcome of our work is a very public good. Governments must invest in it, so governments have every right to take credit, and much of the "profit," when it succeeds.